Question ID
2016_2963
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Supervisory reporting - FINREP (incl. FB&NPE)
Article
99
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
Article/Paragraph
Annex II, Part II, 1.2. C 01.00 - Own funds (CA1) - row 310
Type of submitter
Credit institution
Subject matter
Reconciliation of FINREP and COREP with regard to goodwill
Question

May the amounts of goodwill reported in FINREP and COREP differ due to differences in treatment between the accounting framework and the CRR?

Background on the question

The reporting instructions set out in the Regulation (EU) No 680/2014 concerning goodwill in row 310 lay down that goodwill has the same meaning as under the applicable accounting standard and the amount to be reported shall be the same that is reported in the balance sheet.

The international accounting standard - IFRS 5 states that when any conditions of IFRS 5 (6-8) are met, all assets and liabilities involved shall be reported as held for sale. In FINREP, the total amount of those assets shall then be reported in the template F 01.01 in the applicable row 370 - Non-current assets and disposal groups classified as held for sale.

In our opinion, when the sale is not yet completed the goodwill (as part of held for sale) shall still be accounted as deductions from CET1 items in accordance with Article 36(1)(b) of CRR and goodwill remain to be reported in COREP in C 01.00 in row 310. Thus, the amounts reported in the goodwill rows of FINREP and COREP may differ in this case as the reporting treatment differs between the accounting framework and CRR.

Submission date
Final publishing date
Final answer

As stated in the question, goodwill as defined by IFRS may indeed be reported in different rows of template F 01.01 of Annex III to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting), namely rows 260 (participations), 310 and 370 (IFRS 5) thereof. In some cases, amounts of goodwill may be mixed with items other than goodwill.

In template C 01.00 of Annex I to the ITS on Supervisory Reporting, all goodwill – including the goodwill included in non-current assets and disposal groups classified as held for sale in accordance with IFRS 5 – is shown in row 300 (goodwill) and its subordinated items, among others in row 310 (Goodwill accounted for as intangible asset) and row 320 (Goodwill included in the valuation of significant investments).

For this reason, a reconciliation of the amounts of goodwill reported in row 310 of template C 01.00 and row 310 of template F 01.01 is not be possible in all cases.

Apart from that and in general, figures reported in COREP and FINREP might not reconcile for reasons other than those mentioned in this question (see, for example, Q&A 2013_612).

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.

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